29.9 -0.76 (-2.54%) Buy

HTHT investors herd to book profits while the going is good

13 min read

HUAZHU GROUP LTD (Foreign) is a falling knife that can bleed you if you catch it on Friday. It returned -2.54% to close at 29.9. It is currently trading -39% below it's 52 week high of 49.48.

[Themes containing HTHT]

Buy-and-Hold investors in HTHT experienced a maximum drawdown of -23.35% over the last three months. It gained +8.45% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +0.67%.


HTHT has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, HTHT outperformed the SP500 index on 51% days.

HTHT returned losses on 51% days in the last three months. During this time, it delivered on average +0.24% per day. It delivered it's best daily return of +14.78%, during this period, on Wednesday, 19 Sep, 2018. There was initially a bearish trend during this period which started on 28 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -7.25% losses to investors. This was followed by a bullish trend that started on 12 Nov, 2018 and ended on 16 Nov, 2018. This bullish trend delivered +14.1% to investors.

On monthly basis, HTHT delivered losses in more months over the last year, than profits. HTHT delivered profits less regularly than SP500 index. HTHT significantly outperformed SP500 index in May 2018, when it returned +26.05% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HTHT had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jun 2018 to Oct 2018) during which period it delivered -46.8%. It is interesting to note that both HTHT and SP500 index significantly outperform during months when quarterly/annual results are announced.

I'm only rich because I know when I'm wrong..I basically have survived by recognizing my mistakes.
-- George Soros

HTHT is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in HTHT's volatility from 18 Sep, 2018 to 19 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that HTHT has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

SP500 index has more chance of extreme outcomes than HTHT. Therefore, SP500 must receive a lower allocation than HTHT in your portfolio. SP500 index usually has shorter drawdown period than HTHT.

On a general note (since you are interested in HTHT), if you are an investor in IX, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.

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